What: BNPL is becoming more and more popular at it is seen efficient, cheap and modern.

Why it is important: A quarter of UK adults and 35% of millennials who used BNPL missed payments and were charged interests. This phenomenon is generalizing and attracting the attention of regulators everywhere in the world.

An estimated £2.7 bn has been spent through buy now pay later solutions in the UK in 2020, and researchers mentions that the market have more than doubled in 2021. This solution, that allows to delay or split the cost of purchases without paying interest unless they miss a payment, is becoming more and more popular and quasi all brands propose this solution in the checkout options now.

However, FT ponders if such a growth is not a danger for the younger and more vulnerable customers, who might be drawn to spend more than they can afford, especially given the lack of credit checks. They might not be even realizing that they are taking on debt, and do not consider the prospect of missing payments (which is the case: a third of millennials who have used BNPL have been charged with late fees, and a quarter of the UK adults).

Everywhere in the world, regulators are scrutinizing this market: a consultation has been launched in the UK, the US has requested BNPL players to provide them with information on, their business practices, for instance. Advertising BNPL service might also become more and more difficult in the coming months.

Concerns over the Buy Now Pay Later boom